John Paulson's Fund Crashed 10.6% In September

His flagship Advantage Plus fund fell 10.6%, while his Advantage fund fell 8%.

That means Advantage Plus fell 14% this year through September, while Advantage fell 13% over the same period.

Overall, hedge funds had one of their worst months in a while as the equity market took a dive last month.

An index of hedge fund performance tracked by research group Preqin fell 0.74% in September, while the S&P 500 fell 1.40%.

According to a recent government filing, Paulson owns stakes in pharmaceutical firms Allergan and Valeant. The companies have been in the press a lot since April, when fellow hedge fund manager announced that he was teaming up with Valeant to buy Allergan.

Paulson also owns a stake in pharmaceutical company Actavis. Actavis has been talking to Allergan about buying it - nothing's official yet, though.

The Paulson Advantage fund bets on the outcome of company events, like mergers.

Paulson himself made billions betting against the mortgage market back in 2007, and that success attracted billions in investor money to his fund.

In other words, he has the assets under management to weather the storm - he explained how reassuring that to a bunch of business school students not too long ago.